Whot's
Southeast Asia
Crisis call
Singapore
Supplement for What's NewS
April 1998
China
HongKong
Thailand
Philippines
The newspapers and business journals are still full of the
crisis that has hit the tiger and tiger cub economies of
Southeast Asia with brutal force. As reported last year, even
though we will not emerge unscathed, Rabobank
International as a financial institution has suffered
relatively few losses compared to many competitors. But
what about the human cost? How is the bank that claims a
real customer focus handling the devastation facing many
clients? And what are we doing to help? What's NewS went
calling on Indonesia and Singapore, talking to our people
in Thailand, Malaysia and Hong Kong on the way.
Malaysia
There are no more traffie jams
in Bangkok. The city once
famous for vehicular
congestion and the
concomitant pollution has
reverted to reasonable traffie
flows as cars had to be sold
and the fuel price went up
rapidly, as the baht lost its
value against the dollar. It was
here that the crisis started and
it is here that things are
starting to stabilize as a new
government adheres strictly to
austerity policies aimed at
reform prompted by aid
conditions imposed by the
IMF. In mid-March, the Thai
prime minister, Chuan
Leekpai, on a state visit to the
US said he believed the
fundamentais in Southeast
Asian economies remained
strong: 'I believe that
eventually all of them will
bounce back, although at
different paces, in slightly
different ways, according to
their respective sets of
circumstances.' On his own
country's collapse, he was
frank: 'We created wealth but
were perhaps negligent in
creating competitiveness. We
were successful in our
economie performance, so
Singapore's Koh Ban
Aik - now heading
regiottal restructur-
ing for customers
-Singapore
Indonesia
Indian ocean
much that we did not tackle
issues such as bureaucratie
inefficiency, lack of
transparency, and lack of
accountability.'
LIQUIDITY CRUNCH
While prime minister Chuan is
careful to stress the different
circumstances prevailing in
each of the region's hard hit
economies, the issues he notes
apply to all. Many of the
corporates currently
attempting to survive or at
least salvage something from
the wreckage usually lacked
transparency and
accountability. Singapore's
Koh Ban Aik, our head of
corporate finance who now
heads up regional efforts to
restructure and provide
support for ailing customers,
says: 'In Thailand there was
also a classic mismatch
problem. Many Thai
corporates had dollar debt and
baht income. When the baht
hegan to slip, these companies
were caught with their pants
down. We're still seeing people
in a state of totai denial; many
have seen their net worth
wiped out by the crisis. In
addition, there's a liquidity
crunch. The domestic banks
are powerless to help and
Australia
foreign banks don't want to
further increase their exposure
under current market
conditions.'
DIGESTING PAIN
For Malaysia, the situation
appears less dramatic, at least
superficially. Our own
portfolio is in reasonable
shape, says Klaas-Evert
Engelse of the Kuala Lumpur
office. But a recent Asian
Development Bank conference
indicated Malaysia may be
facing a banking crisis caused
by massive increases in bad
Thailand
Malaysia
Indonesia
